Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 15th, 2017
Benefits & Administration
A new guide published by the Retirement Advisor Council offers plan sponsors helpful guidance about the ways their peers are deploying retirement-specialist financial advisers to maximize the performance of employee benefits, as well as the company’s bottom line. Read more >
Minimal behavior change can significantly reduce the costs of health care in retirement and potentially allow employees to save more towards retirement, a study finds. Read more >
Movement to HDHPs May Be Losing Steam
A PwC study found the wave of growth in high-deductible health plans HDHPs, employers’ go-to strategy in recent years to curb health spending, may be plateauing. Employers are recognizing a limit to how broadly cost sharing can be used to encourage more price-conscious decisions, PWC says. Read more >
MOST READ ARTICLES
1
House Committee Advances Bill to Establish Union Pension Lifeline Program
2
The Senate Math That Could Block SECURE Act
3
Open MEPs Not for Every Plan Sponsor
4
Adidas Sued Over Excessive Fees for 401(k) Participants
5
Employers Encouraged to Offer Multi-Dimensional Wellness Programs
Plan Sponsors Can Correct Gender-Based Retirement Income Gap
Lower retirement account balances, coupled with lower average Social Security benefits and longer life expectancies, mean that women are projected to have much lower income to sustain them throughout retirement than men, according to new research from Prudential. Prudential argues that plan sponsors “increasingly have the ability to leverage data to determine when participants are facing important milestones in their lives… [which] can also help make closing the gap an achievable reality.” Read more >
Products, Deals and People
OneAmerica announced the debut of revenue accounts to help ease the burden on both plan sponsors and financial advisers. OneAmerica revenue accounts offer a shift from commission-based payments to fee-based payments for financial advisers. Created at the plan level, revenue accounts can be used to pay an advisor’s fee, without requiring deductions from participants’ accounts. Read more >
Economic Events

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1% in May after rising 0.2% in April, the Bureau of Labor Statistics reported. The index for all items less food and energy rose 0.1% in May, as it did in April.

Real average hourly earnings increased 0.3% in May, seasonally adjusted. Average hourly earnings increased 0.2%, and the CPI-U decreased 0.1%. Real average weekly earnings increased 0.3% over the month.

The combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,352.0 billion, virtually unchanged from March 2017, but up 5.6% from April 2016, the Census Bureau announced. 

Advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $473.8 billion, a decrease of 0.3% from the previous month, and 3.8% above May 2016. Total sales for the March 2017 through May 2017 period were up 4.4% from the same period a year ago. Retail trade sales were down 0.3% from April, and up 4.0% from last year. Building Material and Garden Equipment and Supplies Dealers were up 10.8% from May 2016, while Nonstore Retailers were up 10.2% from last year.

Market Mirror

Wednesday, the Dow closed 46.09 points (0.22%) higher at 21,374.56, the NASDAQ lost 25.48 points (0.41%) to finish at 6,194.89, and the S&P 500 was down 2.43 points (0.105) at 2,437.92. The Russell 2000 decreased 8.41 points (0.59%) to 1,417.57, and the Wilshire 5000 closed 46.40 points (0.18%) lower at 25,354.74.

The price of the 10-year Treasury note increased 24/32, bringing its yield down to 2.129%. The price of the 30-year Treasury bond climbed 1 29/32, decreasing its yield to 2.772%.

Compliance
City Colleges of Chicago will pay $60,000 to settle a federal discrimination lawsuit filed by the U.S. Equal Employment Opportunity (EEOC). In its lawsuit, the EEOC charged that Harold Washington College, part of the City Colleges of Chicago system, refused to hire Nancy Sullivan, an adjunct professor, for a full-time faculty position because of her age (66). Read more >
Supreme Court Ruling Did Not Resolve Church Plan Challenges
Following oral arguments in March in three cases challenging health care organizations’ church plan status, the U.S. Supreme Court found plans maintained by principal-purpose organizations qualify as “church plans.” However, it did not rule that the hospitals in these cases were principal-purpose organizations. Tess Gee, member in the ERISA & Employee Benefits Litigation practice at Miller & Chevalier in Washington, D.C., tells PLANSPONSOR, “These cases are not over at all for these hospitals.” Read more >
Investing
Educating Investment Committees
Teaching investment committees to monitor plan fees and take on fiduciary responsibilities is important. Gaining knowledge on the subject entails more than skimming through a 10-page pamphlet; it requires interaction among workers, plan sponsors, advisers, consultants—the list goes on. Read more >
From the Magazine
Can This Plan Be Saved?
The defined benefit (DB) pension plan, an American invention, has been a national treasure, providing retirement security to workers in both the private and public sectors for generations. However, running these plans well for the long term is expensive and unwieldy, making them a target for criticism, and regulation, from all sides. Many corporate sponsors have given up on them altogether, while other private and public plan sponsors have been forced to starve them of the resources they need to grow and pay their obligations. Can the American defined benefit plan be saved? Read more >
Small Talk

ON THIS DATE: In 1667, Jean-Baptiste Denys administered the first fully-documented human blood transfusion. He successfully transfused the blood of a sheep to a 15-year old boy. In 1752, Benjamin Franklin experimented by flying a kite during a thunderstorm. The result was a little spark that showed the relationship between lightning and electricity. In 1775, George Washington was appointed head of the Continental Army by the Second Continental Congress. In 1836, Arkansas became the 25th U.S. state. In 1844, Charles Goodyear was granted a patent for the process that strengthens rubber. In 1846, the United States and Britain settled a boundary dispute concerning the boundary between the U.S. and Canada, by signing a treaty. In 1864, an order to establish a military burial ground was signed by Secretary of War Edwin M. Stanton. The location later became known as Arlington National Cemetery. In 1877, Henry O. Flipper became the first African American to graduate from the U.S. Military Academy at West Point. In 1898, the U.S. House of representatives approved the annexation of Hawaii. In 1911, the Computing-Tabulating-Recording Co. was incorporated in the state of New York. The company was later renamed International Business Machines (IBM) Corp. In 1916, U.S. President Woodrow Wilson signed a bill incorporating the Boy Scouts of America. In 1944, American forces began their successful invasion of Saipan during World War II.

SURVEY SAYS: This Sunday is Father’s Day. I’m sure many of your fathers gave you advice about a great number of things in your life. But, this week, I’d like to know, did your father give you financial advice, or advice specifically about retirement savings? And, please share some of the best financial or retirement advice your father offered. You may respond to this week’s survey by 6 p.m. Pacific time today. Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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